If you can't clean up the painted edge, you could always add a 1x3 piece of wood as molding. You can even carry it up to the ceiling to frame that wallpaper. I don't see that paint color in the wallpaper, or maybe it's a lighter version of the flower centers. Maybe stencil on a design using the darker color, or another color from the wallpaper to help tie it together. Then narrow floating shelves or vertical frames or something in the painted areas it you feel you need it. Maybe turn the bed around so the wallpaper is the headboard.

On your paint problem I can't be much help. This usually happens because of damp -- please get a damp expert to make sure that there isn't any damp lurking in your walls. I had this once when I had pipes leaking inside the walls. I didn't know that. The other alternative is something like painting before the plaster is dry or some kind of chemical mismatch. I do know you will have to scrape all the mucky powdery stuff away and start again, at least on those areas. Don't try to seal and prime and repaint until you know exactly what the problem is and how to fix it.

With white fixtures, keep your floors and all tile white or a stone that is mostly white. You can paint the walls above the wainscot (which might be glossy painted wood or beadboard, or you might employ a cabinet for the sink that was painted a very soft sky blue. One narrow trim piece of tile running through the white tile might be the same tone of sky blue. Then, add blue linens / towels / etc. [houzz=] Now, consider what other colors are in your home and select one that is clear and soft and lovely with white. You might use that color instead of sky blue. I used sky blue because it is the color of water and therefore always appropriate in the bath, but you can make the bath flow with the colors you have or plan to have in your home. If this was a master bathroom instead of a common or guest bath, I would shift the choices of stone and tile from white plus white to a lovely off-white, cream, or almond tone - like travertine. Use a neutral like chocolate on the cabinet and add color only with linens and perhaps some art on the wall. [houzz=]

Hello, I feel that you can design this bedroom by having 1 opaque wall at the back, and 3 transparent walls using glass & steel or glass & wooden french doors. The walls should be white, with minimal accents of blue or green, use 2 layers of curtains with sheer, and brass hanging lamps. All doors can be white PU paint. Waterproofing this bedroom will be essential, so make sure you have sealed all joints and surfaces, with a minimum of 2 feet roof overhangs. Hope this helps! G